1. MARKET
COHERENT
ENTERPRISE
Guest Speaking @
Carnegie Mellon University
Enterprise Architecture Certification Program
Denmark, May 28th 2010
2. Who
Am
I
•
Hjalte
Hojsgaard
•
M.Sc.
Business
AdministraCon
&
InformaCon
Systems
Copenhagen
Business
School
–
I’m
finalizing
a
thesis
on
today’s
topic
•
MBA,
Monterey
InsCtute
of
InternaConal
Studies,
CA,
USA
•
Engagement
Manager,
MarketCulture
Strategies
Inc.
•
Blog:
marketcoherency.blogspot.com
•
LinkedIn:
http://www.linkedin.com/in/hjalte
•
TwiRer:
hRp://twiRer.com/hhojsga
2
3. Agenda
• Back
to
Basics:
The
Lemonade
Stand
• Thinking
Outside-‐In
• The
Central
Customer
–
Market
OrientaCon
• Why
is
this
important?
Performance
linkages
• OperaConal
and
Cultural
Challenges
• Expanding
EA
to
accommodate
MO
• A
model:
Market
Coherent
Enterprise
/
Market-‐Driven
Enterprise
Architecture
3
4. Terminology
MO Market Orientation
EA
Enterprise Architecture
MDEA Market-Driven Enterprise Architecture
4
5. The
Case
-‐
Back
to
Basics
For the full lemonade stand example see: http://marketcoherency.blogspot.com/2010/05/lemonade-stand-example.html
5
6. How can we sustain the simple value chain and feedback
loop of the lemonade stand when our business
environment and operations become more complex…..
MO and EA address two important aspects of the value
equation: maintaining customer focus and internal
coordination, efficiency and effectiveness.
6
7. What
is
the
Purpose?
“ A company can outperform rivals only if it can establish a difference it can
preserve. It must deliver greater value to customers or create
comparable value at a lower cost , or do both (emphasis added).
The arithmetic of superior profitability then follows: creating greater value
allows a company to charge higher average unit prices; greater efficiency
results in lower average unit costs
– Michael Porter 1996 – What is Strategy?
The quote illustrates a fundamental need and a place
for MO and EA. MO and EA supports the equation
from two ends, making clear the case for their
separate existence but also their reconciliation.
7
9. Market
OrientaCon
“ … a market orientation refers to the organization-wide generation,
dissemination, and responsiveness to market intelligence”
- Jaworski & Kohli 1990
“ A market orientation is a business culture in which all employees are
committed to the continuous creation of superior value for customers.”
– Narver & Slater 1998
9
11. Why
is
MO
Important
• Market
OrientaCon
has
been
proven
to
strongly
correlate
with
a
variety
of
performance
metrics,
i.e.:
Profitability,
Profit
Growth,
Sales
Revenue
Growth,
Customer
Sa9sfac9on,
New
Product
Success,
Innova9on,
Overall
Performance
11
13. Why
is
EA
Important
• IT
Savvy
Firms
have
20
percent
higher
margins
than
their
compeCtors
–
Genera9ng
Premium
Returns
on
Your
IT
investments,
Sloan
Management
Review
47,
no.
2
(2006):
39,
IT
Savvy
p.
18
• IT
Savvy
ch.
2
p.
40
:
– 17
percent
of
IT
Savvy
firms
have
greater
(strategic)
alignment…
A
metric
posiCvely
correlated
with
business
performance.
They
also
report:
• 31
%
higher
operaConal
efficiency
• 33%
higher
customer
inCmacy
• 34%
higher
product
leadership
• 29%
higher
strategic
agility
13
14. The
Need
to
Architect:
OperaConal
Challenges
• Tangled
IT
systems
translates
into
tangled
business
processes
-‐
the
processes
that
we
use
to
deliver
goods
and
services
to
customers
and
to
create
a
good
customer
experience
-‐
or
vice
versa
• Employees
have
to
work
around
disjoined
systems
• IT
becomes
a
liability
instead
of
an
asset
14
15. The
Need
to
Architect:
Cultural
Challenges
• Do
what
I
say
don’t
do
what
I
do…
Espoused
values….
We
have
a
wriRen
value
set
but
they’re
not
the
values
we
live
by
• Internal
Conflict
and
CompeCCon
• Subcultures
creaCng
misalignment
• Customer
value
is
not
the
end
to
the
acCviCes
performed,
internal
as
well
as
external
15
16. Do
We
Automate
It
All?
• IT
Savvy:
Without
such
a
(digiCzed)
plamorm,
every
customer-‐oriented
business
process
is
dependent
on
insCncts,
judgment
and
aRenCon
of
the
person
compleCng
it….
Yes,
but:
– Can
we
ever
escape
this?
What
is
our
view
on
the
employee:
Is
the
employee
so
helpless
that
we
do
not
trust
him
with
any
decision
power,
and
we
automate
everything
to
eliminate
the
risk
of
human
involvement?
– There
will
always
be
employee
involvement.
Besides,
who’s
designing
and
deciding
the
processes
we
automate?
16
17. The
“Expanded”
EA
view
• The
current
EA
taxonomy
and
framework
can
be
expanded
to
explicitly
encompass
social
systems
–
people
dimensions
alongside
techno
dimensions
– Similar
to
informaCon
systems
we
need
to
manage
and
opCmize
the
ins9ncts,
judgment
and
aTen9on
that
goes
into
decision
making.
We
can
mold
a
culture.
We
can
architect
desired
behaviors.
17
20. InvitaCon
to
parCcipate
• I’m
seeking
professionals
who
are
willing
to
contribute
with
field
experience
in
this
area.
Any
feedback
/
insights
are
welcomed.
– Connect
with
me
on
LinkedIn:
hRp://www.linkedin.com/in/hjalte
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